Southeast Asian investment-grade corporate bond prices will fall as companies struggle to refinance debt and revive earnings, according to RGE Monitor.

“Markets in Asia are operating on the assumption that in the second half things will improve,” Arpitha Bykere, RGE’s senior fixed-income analyst for the region, said in a phone interview from New York. “Our forecasts tell us yes, the second half will be better than the first, but there won’t be a significant improvement in company sales or credit liquidity.”

Spending in countries including Singapore, Malaysia and Indonesia will decline as more people lose their jobs, according to RGE, the analysis group chaired by New York University economist Nouriel Roubini, dubbed Dr. Doom for predicting the credit crisis. With a “double hit” of maturing debt and lower income from sales, corporate defaults will rise, Bykere said.

JPMorgan Chase & Co.’s Asian Investment-Grade Index has risen 12.5% this year while its spread over US Treasuries narrowed 3.07 percentage points to 3.93 percentage points. Asia-Pacific bond sales excluding Japan rose 89% to US$301 billion ($435 billion) since Jan 1 as investors recovered from the shock of Lehman Brother Holdings Inc.’s collapse in September, according to data compiled by Bloomberg.